KLM gives up control to win over customers

Long considered a leader and innovator in the digital landscape, KLM faces challenges as it seeks to hold on to that role. Key among those: how can the carrier continue to engage with new passengers, particularly the occasional traveler. The carrier handles 33 million travelers each year but, on average, each passenger only 1.4 times per year. Back out the population of frequent fliers and that’s a whole lot of travelers for whom the airline app is a burden or annoyance, not a helpful tool.

Yes, pushing customers into a dedicated app gives the airline more control, more data, more opportunity to engage and sell. But that doesn’t always work. And ignoring the travelers who won’t install the app is not a viable option to KLM.

In a recent conversation Martine van der Lee, KLM’s Director of Social Media, explained that, more than just being willing to sell seats, it is critical that the company truly be able to engage with and support customers “wherever they are” in the digital world. And, yes, that means giving up some control over the passenger experience. But it is a worthwhile compromise to gain that extra touch point.

It is a strategic decision, to what extent you want to give away the data on your customers, to what extent you are in control of the functionality you are able to offer. We believe that we need to build the KLM ecosystem on the platforms of others. It is extremely important to look at all the platforms, beyond Facebook. That’s why we’re active on Twitter and WeChat, so that we give customers a choice. We also make sure that we always have multiple platforms at the same time. We don’t want to offer a Facebook-only solution. We believe that’s the only way we can offer functionality that is relevant from a customer experience point of view. It also gives us some leverage with these platforms.

The latest innovation from the carrier’s Social Media Lab is BlueBot, a chat service that can walk a traveler through the booking process. “BB,” as it is known internally, delivered a significant boost in bookings since its launch but KLM wants more from the solution. The carrier intends on growing that BB’s reach in two ways.

First up is expanding BB on to other platforms. WhatsApp is a huge channel for KLM and is a likely candidate for integration in the near future. Adding additional languages is also on the roadmap and will help expand the reach.

The carrier also plans to add new functions to the BlueBot service portfolio. Starting with bookings rather than flight status or online check-in might seem an aggressive play but it helped make the service more compelling for customers. Backfilling the “extra” features into the bot engine comes after it proved value in generating revenue for the carrier. This is critical for the carrier to prove that the investments are worthwhile. Not every iteration or innovation will attract customers and that is okay; the key is innovating quickly and measuring the results.

Only live for two weeks – 'if your flight is delayed for 2 hours you can choose to activate a link via Messenger and get the delay compensation amount added to your boarding pass. That becomes the voucher' – I may burst! Incredible #AviationFestpic.twitter.com/7Ivn1KWLSN

The company recently added a module to deliver EC261-mandated benefits for some passengers through the service. Easing the passenger experience may not be an ancillary revenue solution but it does mean reduced costs to service customers and increased satisfaction levels. SAS similarly proved the value of such recovery efforts, but its efforts were focused on its app, not third party channels. That leaves it in contact with fewer affected customers. Handling passengers better during IORPs can deliver happier passengers than trips without problems so the value proposition is very real.

Generating additional revenue is also important and BlueBot can help with that beyond the flight booking process. If passengers opt in to receive a booking confirmation via Facebook Messenger the carrier takes advantage of that link to push other ancillary offerings as well. Currently that work focuses on hotel, car and tour bookings, similar to the email channel. But with the tie to the booking platform the process can be handled conversationally rather than as a sequence of clicks on a website. That gives the carrier increased opportunity to deliver specific results to specific consumers rather than a more generic shopping experience. This should translate into increased revenue and margins. At least that’s the hope.

And with the rapidly growing number of passengers willing to engage through these channels – far more than will download the app – the revenue potential is huge. Giving up a little control of the passenger to the other companies appears a very profitable move, indeed.

About Seth Miller

Seth Miller has over a decade of experience covering the airline industry. With a strong focus on passenger experience, Seth also has deep knowledge of inflight connectivity and loyalty programs. He is widely respected as an unbiased commentator on the aviation industry.

He is frequently consulted on innovations in passenger experience by airlines and technology providers.